Simon v. Queen Ins. Co. of America

Citations

• 120 La. 477
• 45 So. 396
• 1907 La. LEXIS 668

Syllabus

<p>Insurance — Oonmtions — Further Insurance-Public Policy.</p> <p>The defendant issued its policy of insurance for $1,500 on the building in Shreveport, known as the “Simon Building.” It was partially destroyed by fire. The policy contained the following clause:</p> <p>“It is a part of the consideration of this policy, and the basis upon which the rate of premium is fixed, that the assured shall maintain insurance on each item of property insured by this policy of not less than 75 per cent, of the actual cash value thereof, and that failing so to do, the assured shall be an insurer to the extent of such deficit and in that event shall bear his, her, or their portion of the loss.”</p> <p>The assured obtained other insurance on the building, but fell short of obtaining insurance up to 75 per cent, of the building to the amount of several thousand dollars. On being sued, the defendant company claimed the benefit of the co-insurance clause contained in the policy. Plaintiff resisted this claim on the ground that the clause seeking to make him a co-insurer as declared therein was violative of the provisions of Act No. 135, p. 209, of 1900, known as the “Valued Policy Statute.” This position was sustained by the court, and judgment was rendered accordingly. On appeal to the Court of Appeals that judgment was affirmed, and the ease was then brought to the Supreme Court for review.</p> <p>Held, the stipulation in defendant’s policy as to the assured becoming a co-insurer with the insurance company in a certain contingency to the extent and under the conditions stated is not against public policy. It is not prohibited by law, and a prohibition should not be read into, the law by construction. Liberty of contract is the rule, and limitations and restrictions the exceptions.</p> <p>(Syllabus by the Court.)</p>